SINOPEC Engineering (Group) Co., Ltd. Announces 2013 Annual Results

     SINOPEC Engineering (Group) Co., Ltd. Announces 2013 Annual Results

Achieves Steady Business Growth and Significant Progress in Market Development

PR Newswire

HONG KONG, March 17, 2014

HONG KONG, March 17, 2014 /PRNewswire/ -- SINOPEC Engineering (Group) Co.,
Ltd. ("SINOPEC SEG", together with its subsidiaries known as the "Company")
(stock code: 2386) today announces its annual results for the twelve months
ended 31 December 2013 (the "Period").

Results Highlights

  oThe Company achieved total revenue of approximately RMB43.572 billion, up
    13.1% year-on-year. Profit attributable to shareholders reached
    approximately RMB3.657 billion, up 10.2% from a year ago. Basic earnings
    per share were RMB0.93.
  oThe board of directors recommended paying a final dividend of RMB0.190 per
    share. Together with the interim dividend of RMB0.134 per share, total
    dividend for the Period shall be RMB0.324 per share.
  oDuring the Period, the value of new contracts amounted to approximately
    RMB81.989 billion, representing a significant growth of 176.6% over the
    previous year. At the end of the Period, the Company's backlog reached
    approximately RMB103.968 billion, up 58.6% from the year end of 2012 and
    accounting for 2.4 times of the annual revenue for 2013.
  oThe Company's revenue growth was mainly driven by Engineering, Consulting
    and Licensing as well as EPC Contracting operations in terms of business
    segment. During the Period, revenue from Engineering, Consulting and
    Licensing segment grew 5.6% year-on-year, while that of EPC Contracting
    segment advanced 17.0% year-on-year.
  oThe Company derived its revenue mainly from New Coal Chemicals and
    Petrochemicals industries in terms of revenue sources by industries.
    During the Period, revenue from New Coal Chemicals industry surged 79.7%
    year-on-year, while revenue from Petrochemicals industry increased 11.1%
  oRevenue from the PRC increased 14.1% year-on-year to approximately
    RMB36.541 billion, accounting for 83.9% of the Company's total revenue.
    Meanwhile, revenue from overseas grew 7.9% year-on-year to approximately
    RMB7.031 billion, accounting for 16.1% of the Company's total revenue.

Business Highlights

  oSuccessful Implementation of Major Projects:

       oThe design of Sinochem Quanzhou Project is almost complete and all
         the major equipment and materials have been purchased.
       oMore than 90% of Shijiazhuang Oil Refining and Chemical Project has
         been successfully completed.
       oWuhan Ethylene Project was in full operation during the Period.
         Currently, it is in the performance review period, and all indicators
         meet the contract requirements.
       oMore than half of Shandong LNG Project is complete.
       oAbout 90% of Kazakhstan Aromatics Project has been completed.
       oThe engineering, procurement and construction of Jingbian Coal
         Chemical Project is complete.
       oCurrently, more than 50% of Yulin Coal Chemical Project is complete.
       oZhongtian Hechuang Coal Chemical Project was completed during the

  oExcellent Results in Market Development: While maintaining leading edges
    in traditional industries such as oil refinery and petrochemicals, the
    Company stepped up efforts to explore business opportunities in domestic
    and overseas coal chemical markets. During the Period, the Company signed
    a number of new major contracts with total value of new contracts
    amounting to RMB81.989 billion, including RMB59.294 billion of domestic
    contracts and RMB22.695 billion of overseas contracts. New contract
    amounts in conventional industries such as oil refining, petrochemical,
    clean energy continued to increase. At the same time, new contracts for
    new coal chemical projects increased significantly and reached RMB 34.828
    billion during the Period.

  Representative domestic projects signed during the Period included:

     oOil refining, petrochemical and clean energy contracts: the reform and
       gasoline separation EPC Contracting project of Dalian Western Pacific,
       Guangdong Dapeng LNG project, butadiene unit EPC Contracting of SECCO,
       phenol-acetone EPC Contracting of Sinopec Mitsui Chemicals.
     oNew Coal Chemical Engineering: Zhongtian Hechuang coal chemical
       project, FULL TECH coal chemical project, ChinaCoal Mengda coal
       chemical project, Shaanxi olefin separation unit EPC Contracting of
       Shenhua, Zhejiang Xingxing Energy coal chemical project and Pucheng
       coal chemical project.

  Representative overseas projects signed during the Period included:

     othe EPC contract for the PTA project and the PET project in Texas,
       U.S., with contract value of USD1.150 billion.
     othe EPCC contract with KPI Company for its project in Kazakhstan, which
       covers the general contracting for engineering, procurement,
       construction, startup and performance examination with contract value
       of USD1.850 billion.

  oLeading Technical Strengths: Leveraging the steady progress of its R&D in
    major technologies, the Company has made good progress in R&D projects in
    coal chemical, petrochemical, natural gas and other key fields. During the
    Period, 61 new technology licensing contracts were signed, amounting to a
    total value of RMB422 million. The Company completed 381 new patent
    applications and was granted 247 patents. Moreover, it won 109 awards from
    the provincial / ministerial-level governments for its technological
  oIntensified Corporate Reform: The Company has been actively pursuing
    corporate reform, aiming to achieve the goal of "building the world-class
    refinery and chemical engineering company" and creating the business mode
    of "centralized management, differentiated competition, standardized
    governance and high-end development". It continued to reorganize its
    businesses, pushed forward the reform for specialization and further
    optimized its organizational structure and functionality so as to develop
    the organizational structure and operating mechanism suitable for the
    Company's long-term development.
  oSafe Production: During the Period, the Company continued to reinforce its
    QHSE (quality, health, safety and environment) management, ensuring work
    safety, green production, comprehensive improvement in product quality and
    environmental protection.

Financial Data and Indicators Prepared in Accordance with IFRS

                                                           Unit: RMB'000
                         As at            As at            Change from the
Items                                                      end of last year
                         31 December 2013 31 December 2012
Total assets
                         47,365,269       37,130,025       27.6

Total equity                                             
attributable to
shareholders of the      20,976,714       7,077,985        196.4
Net assets per share
attributable to                                          

shareholders of the      4.74             2.28             107.9
Company (RMB)
                                                           Unit: RMB'000
                         12 months ended 31 December       Year-on-Year Change

Items                    2013             2012             (%)
Revenue                  43,571,851       38,526,489       13.1
Gross profit             6,406,191        5,528,106        15.9
Operating profit         4,413,485        3,832,023        15.2
Profit before taxation   4,751,041        4,252,067        11.7
Net profit attributable
to shareholders          3,656,802        3,316,970        10.2

of the Company
Basic earnings per share 0.93             1.07             (13.1)
Net cash flow used in
operating                (85,995)         1,556,489        (105.5)
Net cash flow used in
                         (0.02)           0.50             (104.0)
activities per share

                                12 months ended 31 December
Items                           2013                   2012
Net profit margin(%)          8.4                    8.6
Return on assets(%)           8.7                    8.1
Return on equity(%)           17.4                   46.8
Return on invested capital(%) 17.4                   46.3

                                As of 31 December 2013 As at 31 December 2012
Asset-liability ratio(%)      55.7                   80.9

Business Review

Mr. Cai Xiyou, Chairman of SINOPEC SEG, commented, "2013 is not only the first
listing year of SINOPEC SEG, but also an important year for the Company's
reform and development. The Board actively responded to domestic and overseas
market changes and development requirements. It set the clear goal of
'building a world-class refinery chemical engineering company' and developed
five strategies: integration strategy, internationalization strategy,
differentiation strategy, persistent innovation strategy and green low carbon
strategy. Moreover, the Company furthered corporate reform by optimizing
resources allocation, enhancing internal control, exerting greater synergies,
actively responding to the market changes, carrying out lean management and
thus achieved satisfactory results."

Business Performance by Segment

The Company's revenue increased 13.1% year-on-year to RMB43.572 billion in
2013. The increase was mainly due to a number of large EPC Contracting
projects, such as Jingbian Coal Chemical Project, Yulin Coal Chemical Project,
Wuhan Ethylene Project, Sinochem Quanzhou Project, Shijiazhuang Oil Refining
and Chemical Project, Shandong LNG Project, Hainan Paraxylene Project and
Kazakhstan Aromatics Project, were implemented as scheduled or settled during
the Period.

The Company's businesses mainly comprise four segments: (1) Engineering,
Consulting and Technology Licensing; (2) EPC Contracting; (3) Construction and
(4) Equipment Manufacturing.

Revenue from the Engineering, Consulting and Licensing segment amounted to
approximately RMB4.354 billion, up 5.6% year-on-year, thanks to increased
engineering workload completion and improved engineering efficiency due to the
implementation of the "engineering standardization" during the Period.

Revenue from the EPC Contracting segment for the Period totaled approximately
RMB23.506 billion, up 17.0% year-on-year due to the progress in the PRC and
overseas EPC Contracting projects, and the corresponding growth in business

Revenue from the Construction segment for the Period grew 10.6% year-on-year
to approximately RMB18.024 billion because the Company increased resource
integration and coordination of efforts to develop the market, leading to the
increase in construction workload.

Revenue from Equipment Manufacturing segment for the Period advanced 9.5%
year-on-year to approximately RMB684 million mainly due to enhanced efforts in
the integration and coordination of internal resources, and an increase in the
business volume of Equipment Manufacturing segment.

Operating results by segment:

                12 months ended 31 December
                2013                        2012
                              Percentage                  Percentage
                Revenue       of total      Revenue       of total      Change
                              revenue                     revenue
                (RMB'000)     (%)           (RMB'000)     (%)           (%)
consulting and  4,354,199     9.4           4,121,829     10.0          5.6
EPC Contracting 23,505,528    50.5          20,082,442    48.8          17.0
Construction    18,024,037    38.7          16,296,826    39.6          10.6
Equipment       684,188       1.5           624,960       1.5           9.5
                -                           -
Subtotal        46,567,952    100.0         41,126,057    100.0         13.2
Total after
inter-segment   43,571,851                  38,526,489                  13.1
(1) The total revenue means the aggregate revenue generated from each business
segment after inter-segment elimination to exclude the impact of inter-segment
transactions. Inter-segment elimination mainly arises from the inter-segment
sales to the EPC Contracting segment made by the construction and equipment
manufacturing segments.

Revenue by Industries

The Company derives its revenue mainly from oil refining, petrochemical and
new coal chemical industries. During the Period, revenue from oil refining
industry and petrochemical industry accounted for 28.2% and 38.3% of the
Company's total revenue, respectively. Meanwhile, revenue from new coal
chemical industry grew rapidly, with its contribution to total revenue
increasing from 12.8% in 2012 to 20.3% in 2013. Compared to 2012, revenue from
the petrochemical and new coal chemical industries witnessed a sharp increase
and rose by 11.1% and 79.7%, respectively, over the previous year. This was
mainly due to the Company's major projects in these industries having entered
their peak stage of construction. On the other hand, revenue from oil refining
industry remained relatively stable.

Revenue breakdown by industries:

                 12 months ended 31 December
                 2013                        2012
                 Revenue     Percentage of   Revenue     Percentage of  Change
                             total revenue               total revenue
                 (RMB'000)   (%)             (RMB'000)   (%)            (%)
Oil refining     12,299,237  28.2            12,556,490  32.6           (2.0)
Petrochemicals   16,701,785  38.3            15,036,189  39.0           11.1
New coal         8,855,434   20.3            4,928,056   12.8           79.7
Other industries 5,715,395   13.1            6,005,754   15.6           (4.8)
Subtotal         43,571,851  100.0           38,526,489  100.0          13.1

Revenue in the PRC and overseas

The Company's revenue generated from the PRC and overseas increased steadily.
Revenue from the PRC grew 14.1% year-on-year to RMB36.541 billion, while
revenue from overseas increased 7.9% year-on-year to RMB7.031 billion. The
contribution of revenues from the PRC and overseas as a percentage of the
Company's total revenue remained stable when compared to 2012.

Revenue breakdown by geographical locations:

         12 months ended 31 December
         2013                                2012
         Revenue     Percentage of total     Revenue     Percentage of  Change
                     revenue                             total revenue
         (RMB'000)   (%)                     (RMB'000)   (%)            (%)
PRC      36,540,730  83.9                    32,011,159  83.1           14.1
Overseas 7,031,121   16.1                    6,515,330   16.9           7.9
Subtotal 43,571,851  100.0                   38,526,489  100.0          13.1

Total Value of Backlog

As at 31 December 2013, the value of the Company's backlog totaled RMB103.968
billion, up 58.6% from a year ago and representing 2.4 times of the annual
revenue of RMB43.572 billion in 2013.

Total values of backlog for each business segment:

                                                               Unit: RMB'000
                                                               Change from the
                             As at            As at            end of last
Items                                                          year
                             31 December 2013 31 December 2012
Engineering, consulting and  6,050,017        4,992,705        21.2
EPC Contracting              85,439,061       46,309,988       84.5
Construction                 12,216,820       13,992,728       (12.7)
Equipment manufacturing      262,454          255,318          2.8
Total                        103,968,352      65,550,739       58.6

Total values of backlog categorized by industries:

                                                                  As at      from
                                                      As at                  the
Items             31         end of
                                                      31 December December   last
                                                      2013        2012       year

Oil refining                                          18,752,220  24,081,504 (22.1)
Petrochemicals                                        38,675,478  20,329,113 90.2
New coal chemicals                                    39,159,298  13,186,369 197.0
Other industries                                      7,381,356   7,953,753  (7.2)
Total                                                 103,968,352 65,550,739 58.6

Total Value of New Contracts

During the Reporting Period, the value of the Company's new contracts was
RMB81.989 billion, representing a substantial increase of 176.6% year-on-year.

Total values of new contracts for each business segment:

                                                           Unit: RMB'000
Items                          12 months ended 31 December Year-on-Year Change
                               2013          2012          (%)
Engineering, consulting and    5,411,511     4,093,899     32.2
EPC Contracting                62,634,601    13,008,165    381.5
Construction                   13,439,019    12,158,493    10.5
Equipment manufacturing        504,333       382,121       32.0
Total                          81,989,464    29,642,678    176.6

Total values of new contracts categorized by industries:

                                                       12 months ended 31    Year-on-Year
Items December              Change
                                                       2013       2012       (%)
Oil refining                                           6,969,953  4,641,968  50.2
Petrochemicals                                         35,048,150 11,652,313 200.8
New coal chemicals                                     34,828,363 6,183,509  463.2
Other industries                                       5,142,998  7,164,888  (28.2)
Total                                                  81,989,464 29,642,678 176.6

Capital Expenditures

During the Reporting Period, the Company's capital expenditure was RMB763
million, which was mainly used to improve production and labor conditions,
update construction equipment, acquire IT system, procure scientific research
equipment and prevent potential safety hazards.

Industry and Business Outlook

In 2013, the world economic situation was complex. Although the global economy
showed signs of recovery, the basis for recovery was still fragile, and there
was a lack of significant industrial technological innovations to drive the
overall situation. The recovery momentum remained relatively weak in developed
countries. The economic growth momentum in emerging market countries was
generally weak, and the economic growth was significantly lower than expected.
These features were more prominent in the domestic economic transformation
period in 2013. As the Chinese government sought to improve stability, advance
reform and opening-up, they initiated the macro-control method, and the
domestic economy showed signs of improvement with better momentum and
stability. The GDP growth rate reached 7.7% in 2013, which was still well
above the world average level.

The global oil refining and chemical industry maintained growth momentum. The
opportunities for long-term growth are embedded in cyclical fluctuations.
Large oil companies in China tended to be cautious in capital expenditures,
and the growth of traditional oil refining and petrochemical project
engineering market were slow. However, underpinned by the growth of new coal
chemical industry and urbanization, demand for oil refining and chemical
products in China will continue to grow. Due to the requirements for upgrading
gasoline and diesel products and differentiation of chemical products, the
scale of China's oil refining and chemical engineering sector will continue to
expand. Meanwhile, technologies for raw materials diversification, such as the
utilization of new coal chemicals and light hydrocarbon, have gradually
developed and matured in recent years. The related industries have experienced
phenomenal growth and will have great potential for further development,
thereby offering the Company drivers and opportunities for future growth.

Going forward, the Company will implement the following measures to enhance
its market leadership:

1. Actively explore the market: The Company will strengthen internal
management, promote resources optimization and make every effort to implement
existing projects to ensure the undertaking of key projects. In 2014, the
target domestic new contract amount of the Company is RMB45 billion, and the
target overseas new contract amount is USD3 billion.

2. Deepen reform and realize the synergies of reorganization: The Company
will actively promote its engineering company and construction enterprise to
conduct joint general contracting. As to market development, it will further
strengthen coordination of market development in China and give full play to
the advantages of each subsidiary. In overseas markets, the Company will
continue to optimize and deploy overseas market deployment and resources.
Moreover, it is building a professional engineering technology research and
development entity in Luoyang. Through reform and adjustment, the operation
mechanism will be improved and the competitiveness and development potential
of the Company's main businesses will thus be improved. For manufacturing
business, the Company will undertake reform to optimize the manufacturing
sector, optimize resources allocation to boost its profitability.

3. Create an integrated new coal chemical industrial chain, market the
one-stop engineering service: The new coal chemical business is one of the
highlights of the Company in its future development. Currently, the Company
boasts technical equipment and engineering achievements in the areas such as
coal gasification, syngas to natural gas, syngas to methanol, syngas to
glycol, methanol to olefin, polyolefin, indirect/direct coal liquefaction.
Through coordination and optimization these factors contribute to the
formation of a technical industrial chain with complete upstream and
downstream support. Combined with its advantages in the conventional
engineering service segment, the Company can provide a complete industrial
service chain including the licensing of process technology, engineering,
procurement, construction and startup services, becoming extremely competitive
in the new coal chemical market and providing owners with a set of complete

4. Continue to increase investment in R&D: In order to achieve the
development objective of "consolidating the traditional technical advantages
in oil refining and chemical engineering, advancing the technology of
alternative petroleum resources", the R&D investment will focus on the
following aspects: (1) reinforce the Company's competitive edges in core
businesses such as oil refining and chemical operations; (2) comprehensively
improve its science and technology support capability for petrochemical
business; (3) focus on optimizing resources, operational procedures, saving
energy and reducing emission, eliminating bottlenecks, and improving
efficiency, as well as step up efforts to promote the development of new
technologies: (4) increase input and participation in the research and
development of large new coal chemical, natural gas chemical technologies; (5)
actively track basic research on leading-edge technologies and application
closely relating to the petrochemical industry.

~ The End ~

This press release is issued by PRChina Limited on behalf of SINOPEC
Engineering (Group) Co., Ltd.

About SINOPEC Engineering (Group) Co., Ltd.

SINOPEC Engineering (Group) Co., Ltd. ("SINOPEC SEG" or "the Company") is the
leading oil refining, petrochemical and new coal chemical engineering company
in the PRC. The Company's main business consists of engineering, consulting
and licensing, EPC Contracting, construction and equipment manufacturing.
According to ICIS Consulting, the Company ranked first both in 2010 and 2011
among all PRC Exploration and Design Enterprises providing services to oil
refining and chemical industries based on total revenue, and ranked among the
top 10 global contractors in 2011 based on revenue generated from services
provided to oil refining and chemical industries. Leveraging 60 years of
industry experience and continual innovation in specialized technologies, the
Company has developed the strongest execution capabilities in the PRC with
respect to engineering and constructing large-scale oil refining,
petrochemical and new coal chemical complexes and is highly competitive in the
international engineering market.


This press release includes "forward-looking statements". All statements,
other than statements of historical facts that address activities, events or
developments that the Company expects or anticipates will or may occur in the
future (including but not limited to projections, targets, other estimates and
business plans) are forward-looking statements. The Company's actual results
or developments may differ materially from those indicated by these
forward-looking statements as a result of various factors and uncertainties,
including but not limited to the price fluctuation, possible changes in actual
demand, foreign exchange rate, market shares, competition, environmental
risks, possible changes to laws, finance and regulations, conditions of the
global economy and financial markets, political risks, possible delay of
projects, government approval of projects, cost estimates and other factors
beyond the Company's control. In addition, the Company makes the
forward-looking statements referred to herein as of today and undertakes no
obligation to update these statements.

Investor and Media Enquiries:

PRChina Limited

Henry Chik / David Shiu / Karl Cheung / Iris An

Tel: (852) 2522 1838 / (852) 2522 1368

Fax: (852) 2521 9955

Email: / / /

SOURCE SINOPEC Engineering (Group) Co., Ltd.
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